Israel calls off talks with Palestinians

Israel has called an indefinite "timeout" in peace talks with the Palestinians with the explanation that Yasser Arafat has hardened his position on the unsettled issues, an Israeli official said today.

Aides to Israeli prime minister Ehud Barak were not immediately available for comment. Palestinian negotiator Saeb Erekat said he had been scheduled to hold talks today with his Israeli counterpart, Gilead Sher.

Mr Erekat said Mr Sher informed him before the start of the meeting that Israel decided to suspend talks until further notice.

"They told me there would be no meeting tomorrow, or the day after, or the day after," Mr Erekat said.

Mr Erekat said he informed Palestinian leader Yasser Arafat of the decision which he called regrettable. "It is obvious that the Israeli government is trying to assign blame to us, but on the other hand, they are closing all the doors to any progress," he said.

In New York, US secretary of state Madeleine Albright yesterday pledged continued support to bring Israeli-Palestinian negotiations to a successful conclusion, saying peace was the "only path; to a prosperous and safe Middle East.

She made the remarks at a dinner honouring former Israeli prime minister Shimon Peres. Israeli foreign minister Shlomo Ben-Ami earlier yesterday said the parties needed to come to agreement by mid-October "at the latest" - a date spurred by US presidential elections in November and the reconvening of Israel's parliament in late October.

Mr Barak is expected to try to shore up his coalition government after recent defections to protest his sweeping concessions to Mr Arafat. The Israeli leader promised delivery of virtually all of the West Bank and Gaza for a Palestinian state.

Israeli-Palestinian negotiations have been hung up because of a sovereignty dispute over Jerusalem holy sites. Gaps remain on other issues, including the future borders of a Palestinian state and the fate of Palestinian refugees.

However, negotiators have expressed confidence that they could conclude a treaty once the Jerusalem dispute is solved. The US is drafting bridging proposals that are to be presented to both sides in a few days.